January 2011 Unemployment Situation (Updated)

Today’s unemployment situation data is…wierd. Most noticeable is that the Civilian Non-Institutional Population declined by 185k people, from 238,889k to 238,704k. Did a lot of people die last month? (Update: Ah. It was an annual population adjustment by the BLS. Carry on.) At the same time, we continue the trend of large increases in the population that dropped out of the labor force, with 319k dropping out last month. Since January, 2010, 2,039k people have left the labor force. On the plus side, 117k more people say they are employed this month than last month.

Still, that 9% unemployment rate is an artifact of 504k people disappearing from the population, not the creation of new jobs, something the anemic 36k new payroll jobs number makes clear. Also, the adjusted U6 unemployment rate surged From 16.6% to 17.3%. In fact, U-3, U-4, U-5, and U-6 all rose sharply. U-3 (Total unemployed, as a percent of the civilian labor force) rose from 9.1% in December to 9.8% last month. So, we got that goin’ for us.

UPDATE: Well, this is embarrassing. I’ve made a calculation error in the Excel spreadsheet, which provided an incorrect unemployment rate, above. I reversed the division between the labor force and the number of employed persons. I noticed that while writing the post above, on how I calculate the number. I’ve corrected the Excel spreadsheet, to prevent the error from recurring in the future.

17 Responses to January 2011 Unemployment Situation (Updated)

Over the years, the White House has taken to finding ways to adjust employment statistics in order to dress the numbers up as nicely as possible. We are approaching the point where, no matter how bad the employment situation really is, the government will proudly claim that “unemployment is at 0% and holding steady.”

Effective with the release of preliminary January 2011 employment estimates in February 2011, BLS will begin updating the Current Employment Statistics (CES) net birth/death model component of the estimation process more frequently, generating birth/death factors on a quarterly basis instead of annually

Aside from retirement, incapacitation, or the death of a rich uncle that you never knew that you had, how does one “leave the labor force”, exactly? Do these people just up and say one day, “Woo-hoo! Screw you, hippies: I’ll never work again!”? Is there a form that one has to fill out?

Dale, from where do you get your Historical labor force participation rate? I ask because I like your equation – it looks to be straight forward and devoid of political considerations too often found in the “official” unemployment figure.

In an unprecedented and controversial move, the White House has launched a new program at the Department of Labor which will refer workers who have complaints about their bosses to a toll free number at the American Bar Association, where they can get a lawyer to work on their case on a contingency fee basis.

Think Unemployment numbers are bogus, check the numbers-out-of-the-ass that are GNP/GDP. Look at the recent “rise” and then look at the government components.
In an article in 2006, entitled, “Studies Prove…“, Thomas Sowell told a story about his early career doing research for the Labor Department:

Whenever I hear the phrase “studies prove” this or that, it makes me think back to the beginning of my career as an economist at the Labor Department in Washington.
Secretary of Labor Arthur Goldberg was scheduled to appear before Congress to argue in favor of some policy that the Labor Department wanted enacted into law. Down at the bottom of the chain of command, I was given four sets of census data that had not yet been published and was told to analyze these data for a report to go to the Secretary of Labor.
Two of these sets of data seemed to support the Labor Department’s position but the other two went counter to it. When I wrote up a paper explaining why this was so and concluded that the statistics overall were inconclusive, there was much dismay among those in the hierarchy between me and the Secretary.
They were also puzzled as to why anyone would write up such a paper, knowing what the Department’s position was on the issues. They took my paper, edited and rewrote it before passing it up the chain of command.
Secretary Goldberg then made his usual confident presentation of the rewritten study to Congress, probably unaware of the contradictory data that had been left out.